A Look Forward to the Upcoming Summer

If you have shipped anything in the past few months, you are likely aware that our industry is suffering from a truck shortage. As monthly tonnage started a comeback this quarter, it became apparent that shippers may be in for a complicated summer. There is recent speculation that as national tonnage declined overall since 2008, the driver pool was gradually shrinking as well. Larger carriers have consolidated operations. Many small carriers have left the market all together.

As tonnage improved this past quarter, the driver shortage became an issue for shippers for two main reasons:

Spot market pricing became more volatile. Consequently, the ability to accurately forecast rates became difficult as competition increased for available trucks.

Shippers and brokers will be forced to reevaluate their relationships with carriers as demand has trended significantly in the carriers' favor.

Recovery will take some time. Once trucking companies decide to place trucks back into the market, the turnaround to hire and train new drivers may be 6-12 months. Many signs point toward an increase in fuel surcharge during the summer driving season. This will only complicate the equipment shortage issues. Furthermore, in July of this year, CSA 2010 will go nationwide. This is an initiative designed to reduce large truck crashes, injuries, and fatalities through improved monitoring of driver health and vehicle safety.

At this point, you may be wondering how all of this is going to affect you. The answer to that question depends on your volume, shipping lanes, and your current relationships with carriers and brokers. Rates have already increased by 15% or more nationwide. Looking forward, we may see another rate increase due to the potential rise in fuel cost. Shipments bound to undesirable destinations have already been and will continue to be affected the most. Partial (LTL) shipments are taking longer to move. There has been a tangible decrease in available LTL freight for carriers to match with yours.

It is critical to begin cultivating your relationships with brokers and carriers again. It is essential to have a vendor you can rely during a tight truck capacity market. Providing your broker or carriers ample time to move your shipment can help reduce costs. It also allows them to the opportunity to identify preferred carriers and driver to service your needs.